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Green stocks. Or, alternative energy companies. Hot rocks. Solar, waves and wind. All possibilities, all listed companies to take a chance on. The alternative energy story centres on potential, as there’s not much to talk about in the way of earnings.

Equities analyst Steven Hing says alternative energy companies deserve much more than a passing glance. A major reason – the carbon tax. If it gets up, the big polluters will pay the tax, with the Federal Government pledging to compensate low and middle-income earners for higher energy bills.

Hing says Middle East tension, potential oil supply disruptions and growing demand for energy establishes the need for genuine alternatives in future. Hing says energy prices will rise higher regardless of whether Australia introduces a carbon tax.

“My list doesn’t include uranium companies, which are perhaps seen as the best swap for coal fired power stations, as it remains clear that nuclear power isn’t on the agenda for Australia,” he says.Hing’s list, while not recommendations to buy, offers potential upside, but it’s high risk. He classes his list as alternative energy sector stocks, but they are spread across several classifications, including industrials, information technology and utilities. As the carbon tax debate heats up, there’s a lot of research and work going on with the aim of becoming a viable alternative energy player.

Ceramic Fuel Cells (CFU)

Share price: 12 cents

Market capitalisation: $150 million

Chart: Share price over the year to 01/04/2011 versus ASX200 (XJO)

Hing says this company is stgeloping solid oxide fuel cell technology to provide reliable, high quality, lower emission power from natural gas and renewable fuels. The company has been stgeloping its technology for commercial use since listing six years ago. Hing says it emits 60 per cent less carbon dioxide than traditional combustion generators, and can be used in a wide range of applications. Hing says Ceramic Fuel Cells may offer a viable alternative and cleaner solution to existing energy generation. “While its main operations are in Europe, particularly Germany, the company is hopeful of breaking into the Australian market with the support of the Victorian Government,” he says. “CFU is past the initial stages of stgelopment, and can now focus on sales.”

Dyesol (DYE)

Share price: 71.5 cents 

Market capitalisation: $92 million

Chart: Share price over the year to 01/04/2011 versus ASX200 (XJO)

Hing says Dyesol has produced a solar cell that – via photosynthesis – converts light into energy. He says the cell works just as well under artificial light – it doesn’t need to be pointed directly at the sun to produce energy. Dyesol’s technology is lower cost compared to conventional silicon- based photovoltaic technology. “It produces electricity more efficiently, even in low light conditions, and can be directly incorporated into buildings by replacing conventional glass panels rather than taking up roof or extra land area,” Hing says. “There’s no need for high-priced raw materials and the manufacturing process doesn’t produce toxic emissions. Potential exists for rapid efficiency enhancement.” The company has a global presence and is in the final stages of stgeloping a commercial product.

Geothermal Resources (GHT)

Share price: 9.2 cents

Market capitalisation: $3.3 million

Chart: Share price over the year to 01/04/2011 versus ASX200 (XJO)

This company is exploring hot rock geothermal energy resources for producing power. Hing says geothermal energy is a significant option for Australia to generate large amounts of base-load power at competitive prices and with zero emissions. Geothermal Resources is based in the Curnamona region of South Australia, but Hing says the company appears to be struggling to raise funds for further exploration. But a price on carbon will assist it in stgeloping technology. Hing says GreenRock Energy (GRK) and Greenearth Energy (GER) are also eyeing these alternative energy options. “Perhaps if a carbon tax is passed, the market will look at these companies again, as GHT was trading higher than 45 cents a year ago,” he says.

Silex Systems (SLX)

Share price: $4.61

Market Capitalisation: $808 million

Chart: Share price over the year to 01/04/2011 versus ASX200 (XJO)

Hing says Silex “appears to be the only company in the world that can placate both the pro-nuclear and pro-solar ranks at the same time”. Silex is a high technology company with five core businesses. These include Laser Isotope Separation Technology (for uranium enrichment), Solar PV Panel Manufacturing, Solar Systems Concentrating PV Technology (a solar power station in Mildura), Translucent Earth Abundant Materials Technology and Chronologic Instrumentation Technology. “From its laser-based isotope separation process to possibly increasing computer semiconductor speed 100-fold, there’s plenty to get excited about,” Hing says. “If successful, Silex’s technology would be truly revolutionary and there’s no denying this company has exciting potential. Although the company is several years away from any sizeable recurring income streams, it’s in a comfortable position after a capital raising in December 2010.”

Carnegie Wave Energy (CWE)

Share price: 10 cents

Market capitalisation: $90 million

Chart: Share price over the year to 01/04/2011 versus ASX200 (XJO)

Hing says this company is investigating wave energy and clean coal power technology. It’s tested a buoyant actuator off the coast of Perth, and its technology is capable of producing desalinated water. “The CETO technology produces 100 per cent carbon free power by harnessing the power that the ocean provides,” he says.

* Share price and market cap figures at March 30, 2011

 

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